Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit
AbstractThe Low Income Housing Tax Credit (LIHTC) represents a novel tax expenditure program that employs “investable” tax credits to spur production of low-income rental housing. While it has grown into the largest source of new affordable housing in the U.S. and its structure is now being replicated in other programs, the LIHTC has also drawn skepticism and calls for its repeal. We provide estimates of tax expenditures under this program and discuss pricing, efficiency, and distributional effects of the program. We also consider the impacts of the recent financial crisis on the LIHTC program and explore implications of resulting policy changes and proposals.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14149.
Date of creation: Jun 2008
Date of revision:
Publication status: published as Mihir Desai, Dhammika Dharmapala, Monica Singhal. "Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit," in Jeffrey R. Brown, editor, "Tax Policy and the Economy, Volume 24" The University of Chicago Press (2010)
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Other versions of this item:
- Mihir Desai & Dhammika Dharmapala & Monica Singhal, 2010. "Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit," NBER Chapters, in: Tax Policy and the Economy, Volume 24, pages 181-205 National Bureau of Economic Research, Inc.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
- R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-05 (All new papers)
- NEP-PBE-2008-07-05 (Public Economics)
- NEP-PUB-2008-07-05 (Public Finance)
- NEP-URE-2008-07-05 (Urban & Real Estate Economics)
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